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Entries in FBO Connection (17)

Wednesday
Dec062017

Survey: Which Topics Should FBO Connection Cover?

We want to know which topics our bloggers should cover on the FBO Connection blog. Take the two-question survey.

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Tuesday
Jan052016

10 Essential Elements of a Favorable Fuel Supplier Agreement

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group

In our last blog post, we concluded our series on the 10 critical elements of an FBO airport lease that was first on our list outlining the six intangibles that can build equity in your FBO.

Next up is a discussion about another intangible that will help build equity in your FBO enterprise: A favorable fuel supplier agreement.

One of the most important agreements you can have with any vendor in the FBO business is the one you establish with your fuel supplier. When done properly, it can add real intrinsic value to your business and, quite frankly, make or break your bottom line.

Over the years, we've reviewed and helped write many fuel agreements and have coached FBOs on the intricacies of arriving at a favorable agreement.

As we teach in our NATA FBO Success Seminars, your initial approach and mindset to developing a favorable fuel supplier agreement is one of partnership. Working as partners with your fuel supplier will provide a win/win agreement where both parties want the other to succeed and are willing to work in concert to that important end.

With this in mind, here are the ten essential elements of a favorable fuel supplier agreement:

1. Term of Agreement.
2. Pricing Methodology.
3. Transportation & Delivery.
4. Terminal Locations.
5. Credit Terms.
6. Taxes: Federal, State, Local & Flowage Fees.
7. Quality Control & Training.
8. Marketing Support.
9. Credit Card Processing.
10. Contract Fuel Programs.

In coming blogs, we’ll discuss each of these and make recommendations on how to improve the equity in your FBO.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

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Monday
Oct122015

Four Tips to Retain Good FBO Employees

Employee recognition and retention: What gets rewarded gets repeated

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group

In our last blog, we mentioned that one of the top concerns for FBOs in our Mid-Year Fuel Sales Survey was finding and keeping qualified employees. Needless to say, it's a lot easier to retain a good employee than to go out and find a replacement.

Keeping your valued employees means you have less churn and provides the ability to deliver a more consistent customer service experience. 

Retention of good, qualified employees should rank as a top goal for FBO managers and supervisors along with retention of customers. You should work just as hard to accomplish both.

Here are four tips on retaining good employees:

1. Develop a good internal culture. Make your FBO a rewarding and fun place to work. Internal culture starts at the top. Lead by example.

2. Listen to your employees. Make sure your employees have a voice in your organization. Be appreciative of their input. Invite them to help create your mission, vision and customer promise statements. Employees who feel their voice is being heard will “buy into” the process and help create and maintain a healthy company culture.

3. Treat your employees as stakeholders. A stakeholder is anyone who has a stake in the company in terms of determining success or failure. Besides employees, other stakeholders include customers, vendors and suppliers.

4. Reward the routine. Let’s face it. Many of the tasks performed by FBO employees are repeated numerous times day in and day out. That’s why it is important to let employees know they are doing a good job, even for the most mundane routine task.

On this last point, we’d like to expound a little. By reward we are not talking about money. Research indicates that what most employees seek is being appreciated for a job well done. So let them know. Pat them on the back. Shake their hand. Let them know you appreciate their contribution as a true stakeholder. For example:

”That’s a great job of cleaning the lavatory. Way to go.”

”Super job of marshalling that aircraft. You used crisp and precise hand gestures. Keep it up.”

”You handled that last customer complaint beautifully by taking ownership of that oversight and making it right. Nice job.”

In their book Managing Knock Your Socks Off Service, Chip R. Bell and Ron Zemke state that what gets rewarded gets repeated. If you want your employees to grow with you, yes, they need to be compensated fairly. But what’s more powerful is your recognition, not just for their time on the job, but for their accomplishments as well.

How true. Showing employees you appreciate their contribution completes the retention cycle and helps cement a more permanent stakeholder relationship with the FBO.

What do you do to retain employees?  Let us hear from you by making a comment below.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

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Tuesday
Sep152015

The Top 10 FBO Challenges for 2015

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group

In our last two blog posts, we reported the results and findings from our Mid-Year FBO Fuel Sales Survey. For this blog post, we look at the answers from a write-in question we asked in our survey:

What has been your biggest challenge so far in 2015? 

With a nod to David Letterman’s Late Night Show Top 10 List, we’ve compiled our own list based on our survey results and named it the Top 10 Challenges FBOs are Facing in 2015, and offer a little sage advice.

No. 10: Contract Fueling. Not surprisingly, this topic made the top ten list. This subject has been discussed and debated many times in various forums including the NATA FBO Success Seminar. Our tip to FBOs struggling with this topic is to stay in your comfort zone with your margins, establish your own FBO contract sales price and offer this to your contract customers. Do your homework and track your contract sales. Did you sell more with a great discount?

No. 9: Managing your fuel inventory. Don’t get caught short. Develop daily dashboard reports to keep track of what’s in your tank. Check fuel prices on Thursdays to spot trends and to order fuel for Monday delivery if the prices are going up on Tuesday.

No. 8: Filling empty hangars. This is a constant challenge for many FBOs. Be proactive in identifying potential hangar prospects within a 50-mile radius. Use your flight tracking program to attain aircraft registration info. Put an attractive incentive package together, pick up the phone and call for an appointment. Also, visit neighboring airports and make cold calls. Know the costs of your hangar facilities.

No. 7: Fluctuating Fuel Prices. Welcome to the new normal. Our advice is make sure you keep track of the various price of loads that are in your tank. Be consistent with the margin you want to achieve relative to selling off your old inventory and adding new.  Platts-based fuel pricing data changes on Tuesdays for most FBO fuel contracts.

No. 6: Runway closures. This is obviously a problem that’s out of your control. Use down time to maintain ground equipment, train staff and freshen up the lounge area.

No. 5: Weather. This is another problem that’s out of our control. However, interestingly, it’s the number five concern among those surveyed.

No. 4: High AvGas Pricing & Availability. We saw this comment many times, especially among smaller FBO operations in the Central time zone. Here is an anonymous comment submitted in the survey that sums up the situation:

 “Uncertain supply issues that continue to plague delivery and pricing of AvGas. Rising prices which are counter to the price of oil and gasoline price at the pump are trends that are harming the industry as a whole, making it difficult, if not impossible to forecast sales and the future of the industry.”

No. 3: Growth and attracting more business to the airport.  Although our survey showed very positive signs of growth among FBOs in larger markets, smaller FBOs pumping under 40,000 gallons of Jet A per month are mostly reporting no growth. Historically, the larger markets improve first, followed by the secondary markets. As reported in our most recent blog post, there are positive industry recovery signs in both flight hours being flown and in the United States manufacturing sectors.

No. 2: Finding and keeping qualified employees. This problem is not unique to the FBO industry. Working hand-in-hand with the local Chambers of Commerce and grass roots efforts at job fairs are critical. But perhaps more importantly is giving a potential employee a realistic look at the offered job. This may include on-the-job demonstrations, before hiring, from seasoned employees of the actual job being offered. While determining aptitude is important, assessing attitude is essential.  Therefore, involve your team in the process.

No. 1: Marketing and inconsistent/low traffic counts. Attracting and waiting for new transient customers is one thing. Keeping the business you have is another. Make sure you are doing everything you can to keep your current customers. That’s worth more than spending marketing dollars to replace a disgruntled customer. It starts with a consistent customer service experience. Invest wisely by making sure your employees have good customer service skills and then lead them by example.  Always ask your current customers if they would recommend you. If they hesitate, then fix the internal problem first.

What is the biggest challenge you face in the FBO business?  We’d like to hear from you. Please write your comment below.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Subscribe:

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Tuesday
Aug252015

Mid-Year FBO Fuel Sales Survey: 71 Percent of Respondents Report Increased or Flat Fuel Sales

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group

Following our Annual FBO Fuel Sales Survey, we initiated our first Mid-Year Fuel Sales Survey. Please note this is a top-line survey designed only to gauge trends. The survey database was provided by AC-U-KWIK.

As a quick review, the annual survey results we released in January indicated that 49 percent of FBOs surveyed reported an increase in Jet A fuel sales in 2014 compared to the results of 2013 while 18 percent reported fuel sales to be about the same. This gives a total of 67 percent reporting having at least the same fuel sales or improved fuel sales over 2013. (For complete results of our annual survey, please click here.)

As part of this mid-year survey, we asked:

For the first six months of 2015, compared to the same period in 2014, are your Jet A fuel sales:

  • Up from a year ago?
  • Down from a year ago?
  • About the same?

A total of 45 percent of the FBOs responding to the survey reported sales were up from a year ago with 26 percent indicating sales were about the same. That’s a total of 71 percent reporting having at least the same fuel sales or improved fuel sales from a year ago.

Conversely, 29 percent indicated Jet A fuel sales were down in 2015 compared to the same first six months of 2014.

For this mid-year survey, we also wanted to get a feel for the average posted Jet A retail price so we asked:

What has been your average posted retail price per gallon of Jet A over the past six months? Respondents were given a choice of price ranges with the following responses:

  • 2 percent reported their posted Jet A price was under $3.00 per gallon.
  • 28 percent between $3.00 and $4.00 per gallon.
  • 52 percent between $4.00 and $5.00 per gallon.
  • 12 percent between $5.00 and $6.00 per gallon.
  • 6 percent indicated more than $6.00 per gallon.

As we all know, because of various industry discount programs, the majority of FBOs do not sell Jet A fuel at the posted retail price. However, the results of this survey question can provide insight into what FBOs are posting on average.

Further, it has been our experience in consulting with many FBOs as well as conducting the NATA FBO Success Seminar, that the average margin on Jet A fuel sales runs between $1.30 and $1.60 per gallon. FBOs that are consistently selling Jet A Fuel below a margin $1.10 are having a hard time of making ends meet.

For our next blog post, we’ll draw some conclusions and take a look at the responses we received from our write-in question:

What has been your biggest challenge so far in 2015? Some of the answers may surprise you.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

Subscribe:

Subscribe to the AC-U-KWIK FBO Connection Newsletter